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E-Z-EM has announced that it has entered into a merger agreement with Bracco Diagnostics Inc. (Bracco), the US-based subsidiary of Bracco Imaging S.p.A and part of the Bracco Group. Under the terms of the agreement, Bracco will acquire all of the outstanding shares of E-Z-EM for $21.00 per share in cash. E-Z-EM has announced that it has entered into a merger agreement with Bracco Diagnostics Inc. (Bracco), the US-based subsidiary of Bracco Imaging S.p.A and part of the Bracco Group. Under the terms of the agreement, Bracco will acquire all of the outstanding shares of E-Z-EM for $21.00 per share in cash.

The offer price represents an approximate 32 per cent premium over the 10-day average closing price per share for E-Z-EM as of October 29, 2007, the last trading day prior to announcement of the transaction. On a fully diluted basis, the total transaction is valued at approximately $241mn for 100 per cent of the capital stock.

As of September 1, 2007, E-Z-EM had no debt outstanding and $44m in cash, cash equivalents and marketable securities. Concurrently with the transaction, Bracco entered into a voting agreement with certain stockholders of E-Z-EM, representing approximately 34 per cent of E-Z-EM's outstanding shares, pursuant to which the stockholders have agreed to vote their shares in favor of the merger.

This transaction represents the culmination of a comprehensive strategic alternatives process conducted by the E-Z-EM Board of Directors over the past year to identify the best alternative to create value for E-Z-EM's shareholders. The independent members of the E-Z-EM Board of Directors have unanimously approved the merger agreement, and recommend adoption of the agreement by the E-Z-EM shareholders.

Completion of the transaction is contingent upon the satisfaction of customary closing conditions, including the approval of a majority of E-Z-EM's shareholders and regulatory approval. The transaction is currently expected to close in early 2008.

Commenting on the announcement, Anthony A. Lombardo, president and CEO of E-Z-EM, said “E-Z-EM has had a long association with Bracco Group, as we manufacture one of their oral imaging products and Bracco represents E-Z-EM in Italy as our distributor.

"Bracco is a world leader in developing contrast agents for diagnostic imaging and is well respected in the global marketplace. The E-Z-EM and Bracco brands are well recognized and respected for quality and clinical performance, and we believe the combination will create significant synergies in our product platforms. We believe that this alignment will enhance the combined companies' ability to serve an increasingly competitive marketplace, as it creates a global powerhouse in diagnostic imaging well positioned to offer customers a comprehensive set of clinical solutions."

RBC Capital Markets served as exclusive financial advisor to E-Z-EM on the merger and the review of strategic alternatives, and provided a fairness opinion to the E-Z-EM Board of Directors. Credit Suisse Securities (USA) LLC and Evercore Partners served as financial advisors to Bracco Diagnostics Inc. in the transaction.